The euro fell as low as $1.2558, its lowest since early December, before recovering a tad to $1.2572 <EUR=>, down 0.1 percent on the day. (Reporting by Satomi Noguchi)

Source: Retures

The Canadian dollar initially tumbled but later clawed back as rising risk appetite sparked a broad U.S. dollar selloff. It is down 0.0037 to 0.8076 against the U.S. dollar (1.2382 USD/CAD) and up 0.35 to 74.34 against the yen.

StatsCan reported a record number of job losses in January with the economy shedding 129,000 jobs, sending the unemployment rate up 0.6 percentage points to 7.2%. Economists were expecting 40k job losses and 6.8% unemployment.

Meny Grauman, economist at CIBC World Markets, said the pace of job losses in Canada is dizzying.

“The post-war period has never seen such a large stretch of monthly job losses, and even more worrying, there is no sign that the deluge is stopping,” he said.

Steve Butler, director of FX trading at the Bank of Nova Scotia, said he is looking for the loonie to weaken considerably over the next few days and has a target of 1.28 by early next week. He also said it will be a matter of time before it breaks out of its current range.

“This data is going to cause the markets to rethink what the bank of Canada is going to do,” he said.

Some economists now expect the Bank of Canada to bring interest rates below 1.00% at its next meeting in March.

Matt Perrier, currency analyst from BMO Capital Markets, said he is not convinced that the USD/CAD will be able to break the 1.30 level. He said he sees that level as a strong buying point for U.S. dollar hedgers.

In the short term, Perrier said he is looking for the pair to start hitting resistance at 1.2761.

Elsewhere in foreign exchange, the U.S. dollar is up 0.84 to 92.07 against the yen and the Dollar Index is down 0.287 to 85.770.

The euro is up 0.0080 to 1.2872 against the U.S. dollar, up 0.0177 to 1.5938 against the Canadian dollar, down 0.0033 to 0.8721 against the pound sterling and is higher by 1.85 to 118.51 against the yen.

The pound sterling is up 0.0147 to 1.4758 against the U.S. dollar and up 0.0273 to 1.8275 against the Canadian dollar.

Source:  Economicnews.ca

Liquidity

In the spot Forex market, almost $2 trillion is traded daily, making it the largest and most liquid market in the world. This market can absorb trading volume and transaction sizes that dwarf the capacity of any other market. The futures market traders a puny $30 billion per day. Thirty billion?!! Peanuts! The futures markets can’t compete with its limited liquidity. The Forex market is always liquid, meaning positions can be liquidated and stop orders executed without slippage except in extremely volatile market conditions.

24-Hour Market

At 2:15 p.m. EST Sunday, trading begins as markets open in Sydney and Singapore. At 7 p.m. EST the Tokyo market opens, followed by London at 2 a.m. EST. And finally, New York opens at 8 a.m. EST and closes at 5 p.m. EST. So, before New York trading closes the Sydney and Singapore markets are back open – it’s a 24 hour seamless market! As a trader, this allows you to react to favorable or unfavorable news by trading immediately. If important data comes in from England or Japan while the U.S. futures market is closed, the next day’s opening could be a wild ride. (Overnight markets in futures currency contracts exist, but they are thinly traded, not very liquid, and are difficult for the average investor to access).

Commission Free Trading

You know what’s great about trading currencies? You pay NO commissions! Because you deal directly with the market maker via a purely electronic online exchange, you eliminate both ticket costs and middleman brokerage fees. There is still a cost to initiating any trade, but that cost is reflected in the bid/ask spread that is also present in futures or equities trading. Brokers are compensated for their services through the bid-ask spread instead of via commissions.

Price Certainty

When trading Forex, you get rapid execution and price certainty under normal market conditions. In contrast, the futures and equities markets do not offer price certainty or instant trade execution. Even with the advent of electronic trading and limited guarantees of execution speed, the prices for fills for futures and equities on market orders are far from certain. The prices quoted by brokers often represent the LAST trade, not necessarily the price for which the contract will be filled.

Guaranteed Limited Risk

Traders must have position limits for the purpose of risk management. This number is set relative to the money in a trader’s account. Risk is minimized in the spot FX market because the online capabilities of the trading platform will automatically generate a margin call if the required margin amount exceeds the available trading capital in your account. All open positions will be closed immediately, regardless of the size or the nature of positions held within the account. In the futures market, your position may be liquidated at a loss, and you will be liable for any resulting deficit in the account. That sucks.

By Babypips

Which Currencies Are Traded?

The most popular currencies along with their symbols are shown below:

Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency.

When Can Currencies Be Traded?

The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend.

The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market – you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too…

By Babypips

The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.

How to Read an FX Quote

Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:

GBP/USD = 1.7500

The first listed currency to the left of the slash (”/”) is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).

When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound.

When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound.

The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.

You would buy the pair if you believe the base currency will appreciate (go up) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (go down) relative to the quote currency. Long/Short

First, you should determine whether you want to buy or sell.

If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader’s talk, this is called “going long” or taking a “long position”. Just remember: long = buy.

If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called “going short” or taking a “short position”. Short = sell.

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Do you see the potential to profit from trading currencies, but learning to trade just seems too intimidating? Have you watched enthusiastically to the recent crash of the dollar, but simply do not know how to go about trading?

While it is simple to start Forex trading online, the maintenance of long-term profitability is not an easy task. You have probably heard that 90% of Forex traders lose money in the long run. If indeed this is true, is the result of a couple of different factors.

Overtrading: Every job costs you a few snags-Consider your jobs well before you make them. Each defective trade, even if it is released quickly, drains equity. Mismanagement of money: A bad trade can wipe out a year’s patient, intelligent trading. Manage your risks by using orders stop loss, so you never risk too high a percentage of your capital on a single trade. Lack of knowledge: If you never marketed before Forex, educate yourself! Successful traders were not born that way. The difference between success and failure in the forex market largely depends on knowledge and education of a trader. For the beginning trader, a good education is essential before investing in the changes. Find a program that you feel comfortable with, and begin practicing on a demo account.

Trading on the foreign exchange market provides unique opportunities for profit, but it is also very risky. Make sure you know what you are getting into before you start to negotiate, and start trading only when you feel comfortable in your knowledge and skills.

Forex scalps is a negotiating strategy in which the trader makes dozens, or even hundreds of transactions per day, trying to catch a few snags by trade. Generally, scalpers stay in the trades of less than a minute, bolting, as soon as their position reflects a few snags.

Brokers do not look kindly scalpers then, the number of times scalpers will leave a position outside the office dealing has time to process your order. This means that the brokerage had to eat the position of the scalper success will always make money, money that comes directly from the pockets of the brokerage.

To avoid this conflict of interest between the scalpers and the brokerage often trade with scalpers electronic communication network (ECN) brokerage, which circumvent the office dealing with online merchants’ direct exchange with one another. ECN dealers generally less than traditional methods of liquidity on brokerage desk and collect a commission for trade, but their pip spreads are narrower.

To be a successful online Forex scalper, merchants must follow strict rules for managing risks. Because scalper grabs only a few seeds at a time, a big loss can wipe out dozens and dozens of careful, meticulous business. Traders must ensure the use of stop orders, ensuring that the profit or loss of margin on each trade is very low.

Until the mid-seventies, the major industrial economies were governed by the Bretton Woods agreement of 1944. The Bretton Woods Agreement, which was named after the venue of the international conference of the establishment of this new decree obliges participating international monetary savings to peg their currencies to the dollar, which was itself within a standard deviation of 1% of the rate prevailing in gold.

The architects of the Bretton Woods agreements hopes to prevent countries from artificial devaluation of currencies to make their products more attractive on the international market, which led in part to a precipitous decline in the world economy in the years 30.

The system in place, they lasted for the next three decades. Shrinking confidence in the dollar, however, lead to a new international monetary system of floating rates, which means that market forces are ordinary, rather than government intervention, would determine the value of currencies. It is from this new system that the modern Forex market was born.

In a system of floating exchange rates, the market demand determine the relative value of currencies. Such a system is thought to themselves, like any inefficiency is hammered out in the market. If, for example, global demand for a currency falls, goods become cheaper, and thus the value begins to increase with the new demand.

In a floating exchange system, operators can exploit market inefficiencies before correcting himself. These operators are called arbitrageurs, and they are able to use online brokers to execute their trades. If you are interested in starting to trade in the Foreign Exchange, please visit our broker to find a broker for you ..

Strong consumer price of the United States of data led to a lower than expected Federal Reserve lowering interest rates, causing the biggest one-day rally in the dollar against the euro since May 2005. At the end of the day, Friday the 14th, the euro fell 1.5 percent to 1.4412, has never been so low since October. This is the third week in a row that the dollar has rallied against major currencies.

Effective consumer spending reports were used in part to reduce concerns that the mortgage crisis force of the American economy into a recession, and the generalization of inflationary concerns seem to point to maintaining a conservative approach reductions in interest rates by the feds, which is more good news for the greenback.

Many analysts are now predicting the dollar rally will continue in the short term, fingering 1.43-or 1.40-that the reasonable levels of support. In addition, there was an increase in the chorus of voices saying that the dollar will rebound in 2008, due to the decrease in budget and trade deficits. If we have reason to believe that the Fed will be conservative in cutting interest rates, this will lead to increased appetite for international investment in the American market, creating greater demand for the dollar.

However, we are wary that the dollar rally is simply a correction rather than a trend reversal. In addition, we would not be surprised to see another test of the $ 1.50 level in the short term, although the outlook for the dollar in 2008 are good.